Bondage without chains for Uber, Ola drivers

Taxi hailing apps were hailed as the next best invention which will lift the taxi drivers out of poverty at the same time providing superior service delivery to the riders. But, the reality of profit making model starts biting the drivers now.

Thousands of drivers in various Indian cities quit their jobs as “private drivers” and jumped on the Ola/Uber bandwagon with big dreams. Now, they are hurting physically and their earnings have taken a nose dive.

“It starts with a niggling cramp on the calf muscles just when the clutch pedal is pressed down. The cramp exacerbates as the day progresses and by noon, a burning sensation envelope the quadriceps. But there are nine more hours to go and numerous rides to finish for this city cab driver.”

“I may not be able to do this for long. I’ll go back to driving private cars after that. It doesn’t make sense to put health at risk for the kind of money we’re getting now,” says Dhirendra, who drives a Maruti Dzire in Mumbai for Uber, an app-based taxi service.

Instead of the touted upto Rs 1 lakh per month income, the average earning has dropped to around Rs 30,000 per month. To earn that the driver is “free” to work for more than 12 hour as the number of rides during non-peak hours drop. Friendly rides (discounts, bonus ride etc) offered by the taxi aggregators further hurt earnings.

Taxi aggregators tell drivers to accept rides “for however long they want…”. That’s where the root of their problems lies. Ola/Uber drivers have to put in 14–16 hours a day (with a good mix of peak hour and non-peak hour rides) to earn a decent sum of money every month.

The aggregator companies, Uber and Ula are now trying to consolidate their market position and profitability.

“The days of capital dumping are over… We’ve an aggressive pricing model now,” said a senior employee of Ola Cabs. They started slashing driver incentives and commissions.

Most Ola/Uber drivers (in Mumbai) set aside Rs 1,000 for diesel and Rs 200–250 for car maintenance every day. On an average, these drivers bill Rs 1,500–1,800 every day. Their earnings upside (or profit) comes from the commission and incentives paid by taxi aggregators. A drop in commission and incentives makes the whole structure unviable for drivers.

In Mumbai, incentives have dropped from around Rs 6,000-6,500 per 12-peak-hour-rides to Rs 4,500–5,000 per 14-peak-hour-rides. There has been a corresponding drop (in incentives) in other peakhour drive formats as well.

Incentives and commissions were purposely kept high (in the formative years of Ola and Uber India) to attract more drivers. Now, the aggregators are now trying to reduce payouts and increase the number of rides, simultaneously cutting fares, doling out discounts and offering bonus rides to customers.

Will all the “free” market evangelists eat their words about the miracles of taxi hailing apps? “Free” market is not win-win, it offers “freedom” to the capitalists to exploit the workers. Under free market conditions, capital always wins at the cost of workers .